What changed in this filing

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

2025-05-01 compared with 2024-11-01 · 34 added, 37 removed, 55 unchanged (56% of the section changed)

2 unchanged sentences

These instruments arise from transactions entered into in the normal course of business.

The following table presents the future principal payment obligations and fair values associated with our long-term debt instruments assuming our actual level of long-term indebtedness as of September 30, 2024:

(in thousands)

Revolving Credit Facility

2024 Term Loan

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While we cannot predict our ability to refinance existing debt or the impact interest rate movements will have on our existing debt, we continue to evaluate our financial position on an ongoing basis .

We have performed a sensitivity analysis assuming a hypothetical 1% increase in our variable interest rates as of September 30, 2024.

As of September 30, 2024, the analysis indicated that such an adverse movement would have caused our interest expense to increase by approximately 1.8% for the nine months ended September 30, 2024.

We are exposed to market risk from changes in foreign currency exchange rates in connection with our operations in Brazil, Canada, Chile, Peru, Colombia, South Africa, the Philippines, Tanzania, and to a lesser extent, our markets in Central America.

We have performed a sensitivity analysis assuming a hypothetical 1% increase in our variable interest rates as of March 31, 2025.

As of March 31, 2025, the analysis indicated that such an adverse movement would have caused our interest expense to increase by approximately 1.4% for the three months ended March 31, 2025.

We are exposed to market risk from changes in foreign currency exchange rates in connection with our operations in Brazil, Canada, Chile, Peru, Costa Rica, South Africa, Tanzania, and to a lesser extent, our markets in Central America.

In each of these countries, we pay most of our selling, general, and administrative expenses and a portion of our operating expenses, such as taxes and utilities incurred in the country in local currency.

In addition, in Brazil, Canada, Chile, South Africa, and the Philippines, we receive significantly all of our revenue and pay significantly all of our operating expenses in local currency.

In Colombia, Costa Rica, Peru, and Tanzania, we receive our revenue and pay our operating expenses in a mix of local currency and U.S.

In addition, in Brazil, Canada, Chile, and South Africa, we receive significantly all of our revenue and pay significantly all of our operating expenses in local currency.

In Costa Rica, Peru, and Tanzania, we receive our revenue and pay our operating expenses in a mix of local currency and U.S.

All transactions denominated in currencies other than the U.S.

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The cumulative translation effect is included in equity as a component of Accumulated other comprehensive loss, net.

For the nine months ended September 30, 2024, approximately 21.7% of our revenues and approximately 31.3% of our total operating expenses were denominated in foreign currencies.

We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in the Brazilian Real from the quoted foreign currency exchange rates at September 30, 2024.

As of September 30, 2024, the analysis indicated that such an adverse movement would have caused our revenues and operating income to decline by approximately 1.3% and 1.0%, respectively, for the nine months ended September 30, 2024.

As of September 30, 2024, we had intercompany debt, which is denominated in a currency other than the functional currency of the subsidiary in which it is recorded.

For the three months ended March 31, 2025, approximately 20.5% of our revenues and approximately 29.3% of our total operating expenses were denominated in foreign currencies.

We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in the Brazilian Real from the quoted foreign currency exchange rates at March 31, 2025.

As of March 31, 2025, the analysis indicated that such an adverse movement would have caused our revenues and operating income to decline by approximately 1.2% and 0.7%, respectively, for the three months ended March 31, 2025.

As of March 31, 2025, we had intercompany debt, which is denominated in a currency other than the functional currency of the subsidiary in which it is recorded.

As settlement of this debt is anticipated or planned in the foreseeable future, any changes in the foreign currency exchange rates will result in unrealized gains or losses, which will be included in our determination of net income.

A change of 10% in the underlying exchange rates of our unsettled intercompany debt at September 30, 2024 would have

resulted in approximately $114.8 million of unrealized gains or losses that would have been included in Other income (expense), net in our Consolidated Statements of Operations for the nine months ended September 30, 2024.

A change of 10% in the underlying exchange rates of our unsettled intercompany debt at March 31, 2025 would have resulted in

approximately $111.8 million of unrealized gains or losses that would have been included in Other income (expense), net in our Consolidated Statements of Operations for the three months ended March 31, 2025.

Special Note Regarding Forward-Looking Statements

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• our ability to capture and capitalize on industry growth and the impact of such growth on our financial and operational results;

 the consolidation of domestic and international wireless service providers and the impact of such consolidation on our financial and operational results, including churn;

• the consolidation of wireless service providers and the impact of such consolidation on our financial and operational results, including churn;

• our intent to grow our tower portfolio domestically and internationally and expand through acquisitions, new builds and organic lease up on existing towers;

 that our site leasing business is characterized by stable and long-term recurring revenues;

 that we will be able to continue to secure rights to the land underlying our towers, and the impact of such strategy on our financial and operational results;

• our strategies for growing, and ability to grow, our cash flows;

• core leasing revenue growth, on an organic basis, in our domestic and international segments, and the drivers of such growth;

• our site leasing business being characterized by stable and long-term recurring revenues;

• our future cash capital expenditures, both discretionary and non-discretionary, including expenditures required for new builds and to maintain, improve, and modify our towers, ground lease purchases, and general corporate expenditures, and the source of funds for these expenditures;

 our capital allocation strategies and the impact of these strategies on our future financial and operational results including our goal of increasing our Adjusted Funds From Operations per share;

• that we will be able to continue to secure rights to the land underlying our towers, and the impact of such strategy on our financial and operational results;

• the timing for closing of pending acquisitions, including the Millicom transaction;

• our future liquidity requirements, including our debt service in 2024, and our ability to meet such requirements with cash on hand, capacity under our Revolving Credit Facility, and our cash flows from operations for the next twelve months will be sufficient to service our outstanding debt during the next twelve months;

 our previously announced agreement with Millicom, including the timing of closing;

 our site leasing revenue and our strategies for growing our cash flows;

 our election to be taxed as a REIT, the impact of such election and our intent to continue to operate as a REIT;

 that we will be able to grow our dividend rate in the future;

 the timing for closing and costs of pending acquisitions;

 depreciation and amortization expense;

the impact of inflation;

 the use of NOLs to reduce REIT taxable income;

• our election to be taxed as a REIT, our intent to continue to operate as a REIT and the use of NOLs to reduce REIT taxable income;

• our capital allocation strategies and the impact of these strategies on our future financial and operational results including our goal of increasing our Adjusted Funds From Operations per share;

• our expectations regarding dividends and our ability to grow our dividend in the future and the drivers of such growth;

• our expectations regarding our future cash capital expenditures, both discretionary and non-discretionary, including expenditures required for new builds and to maintain, improve, and modify our towers, ground lease purchases, and general corporate expenditures, and the source of funds for these expenditures;

• the impact of compliance with applicable laws and regulations, including environmental laws, and various legal proceedings on our financial results and future business prospects;

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The most important factors that could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements include, but are not limited to, the following:

 developments in, and macroeconomic influences on, the wireless communications industry in general, and for wireless communications infrastructure providers in particular, in the domestic and international markets in which we operate ;

 the ability and willingness of carriers to invest in their networks in such markets;

 the impact of consolidation among wireless service providers, including on our churn rates;

 the increasing competitive environment in the markets in which we operate and the impact on our ability (i) to retain and renew at anticipated lease rates our current customers and (ii) to identify and close sufficient volume of tower acquisitions that satisfy our investment criteria to meet our portfolio growth expectations;

 the ability of DISH Wireless to become and compete as a nationwide carrier;

 the impact of interest rates on our results of operations and the timing of, and ability to, refinance our maturing existing indebtedness at commercially reasonable rates or at all;

• developments in, and macroeconomic influences on, the wireless communications industry in general, and for wireless communications infrastructure providers in particular, that may slow growth or affect our customers’ access to sufficient capital, or ability to expend capital to fund network expansion or enhancements;

• the impact of churn based on prior and future consolidation among wireless service providers;

• the ability of Echostar to become and compete as a nationwide carrier;

• the impact of high interest rates on our results of operations and our ability to refinance our existing indebtedness at commercially reasonable rates or at all;

• our ability to continue to comply with covenants and the terms of our credit instruments and our ability to obtain additional financing to fund our capital expenditures;

 our ability to successfully manage the risks associated with international operations, including risks relating to political or economic conditions, inflation, tax laws, currency restrictions and exchange rate fluctuations, legal or judicial systems, and land ownership;

 our ability to successfully manage the risks associated with our acquisitions, including our ability to satisfactorily complete due diligence on acquired towers, our ability to accurately anticipate the future performance of the acquired towers, our ability to receive required regulatory approval, and, once acquired, our ability to effectively integrate acquired towers into our business and to achieve the financial results projected in our valuation models for the acquired towers;

• our ability to successfully manage the risks associated with international operations, including risks relating to competition, political or economic conditions, inflation, potential tariffs, tax laws, currency restrictions and exchange rate fluctuations, legal or judicial systems, and land ownership, including land ownership risks with respect to towers we do not own;

• our ability to successfully manage the risks associated with our acquisition initiatives, including our ability to satisfactorily complete due diligence on acquired towers, the amount and quality of due diligence that we are able to complete prior to closing of any acquisition, our ability to accurately anticipate the future performance of the acquired towers, our ability to receive required regulatory approval, the ability and willingness of each party to fulfill their respective closing conditions and their contractual obligations, and, once acquired, our ability to effectively integrate acquired towers into our business and to achieve the financial results projected in our valuation models for the acquired towers;

• the health of the economies and wireless communications markets of the international jurisdictions we operate in, and the willingness of carriers to invest in their networks in such markets;

• our ability to secure as many site leasing tenants as anticipated, recognize our expected economies of scale with respect to new tenants on our towers, and retain current leases on towers;

 our ability to obtain the necessary regulatory approvals and satisfy the other closing conditions of the Millicom transaction;

• our ability to secure and deliver anticipated services business at contemplated margins;

 our ability to build new towers, including our ability to identify and acquire land that would be attractive for our customers and to successfully and timely address zoning, permitting, weather, availability of labor and supplies and other issues that arise in connection with the building of new towers;

• our ability to build new towers, including our ability to identify and acquire land that would be attractive for our customers and to successfully and timely address the issues that arise in connection with the building of new towers;

• our ability to compete for the acquisition of towers and other factors that may adversely affect our ability to purchase towers that meet our investment criteria and are available at prices which we believe will be accretive to our shareholders and allow us to maintain our long-term target leverage ratios while achieving our expected portfolio growth levels;

• our capital allocation decisions and the impact on our ability to achieve our expected tower portfolio growth levels;

• our ability to protect our rights to the land under our towers, and our ability to acquire land underneath our towers on terms that are accretive;

• our ability to sufficiently increase our revenues and maintain expenses and cash capital expenditures at appropriate levels;

• our ability to successfully estimate the impact of regulatory and litigation matters;

• natural disasters and other unforeseen damage for which our insurance may not provide adequate coverage;

• a decrease in demand for our towers;

• the introduction of new technologies or changes in a tenant’s business model that may make our tower leasing business less desirable to existing or potential tenants;

• our ability to qualify for treatment as a REIT for U.S.

federal income tax purposes and to comply with and conduct our business in accordance with such rules;

 our ability to utilize available NOLs to reduce REIT taxable income;

federal income tax purposes and to comply with and conduct our business in accordance with such rules and to utilize available NOLs to reduce REIT taxable income;

• our ability to successfully estimate the impact of certain accounting and tax matters, including the effect on our company of adopting certain accounting pronouncements and the availability of sufficient NOLs to offset future REIT taxable income;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk